Lovitt Resources Inc. — Interim / Quarterly Report 2021

Mar 2, 2021

LOVITT RESOURCES INC.

Consolidated Financial Statements

For the six months ended December 31, 2020 and 2019

(Unaudited) (Expressed in U.S dollars)

Lovitt Resources Inc.

Interim Condensed Consolidated Statements of Financial Position For the six months ended December 31, 2020

(Unaudited - Expressed in U.S. Dollars)

Note	December 31, 2020 $ June 30, 2020 $
ASSETS Current Cash Amounts receivable Current portion of note receivable Prepaid expenses Non-current Note receivable 3 Property, plant and equipment 4 Mineral properties 5	13,045 151 5,909 4,762 9,612 9,833 332 1,422
	28,897 16,168 24,473 31,610 180,039 180,909 680,992 615,811
	885,504 828,330
TOTAL ASSETS	914,402 844,498
LIABILITIES Current Accounts payable and accrued liabilities 11 Accrued interest payable 11 Deposit 12 Note payable 6 Demand loans 7,11 TOTAL LIABILITIES	13,681 53,181 421,722 388,151 83,026 83,026 4,255 4,210 1,332,858 1,314,724
	1,855,542 1,843,292
SHAREHOLDERS’ EQUITY (DEFICIENCY) Share capital 8 Share Issuance Costs Contributed surplus Currency translation reserve Deficit TOTAL SHAREHOLDERS’ EQUITY	4,506,066 4,312,197 (2,549) - 935,727 935,727 (28,416) (28,416) (6,351,969) (6,218,302)
	(941,141) (998,794)
TOTAL LIABILITIES AND EQUITY	914,402 844,498

Nature of operations and going concern (Note 1) Event after the reporting period (Note 13)

These financial statements were authorized for issue by the Board of Directors on March 1, 2021.

“C. Lorne Brown” “Dominic Lapenna”

Director Director

The accompanying notes are an integral part of these interim consolidated financial statements

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Lovitt Resources Inc.

Interim Condensed Consolidated Statements of Comprehensive Income (Loss) For the three months ended December 31, 2020 and 2019

(Unaudited - Expressed in U.S. Dollars)

	Note		Three months	Three months	Six months	Six months
			ended	ended	ended	ended
			December 31,	December 31,	December 31,	December 31,
			2020	2019	2020	2019
			$	$	$	$
Expenses
Depreciation of property,			435	541	870	1,080
plant and equipment
General and administrative			2,114	1,315	3,986	10,533
Interest on demand loans		11	17,645	22,121	33,596	32,358
Management fees		11	30,000	30,000	60,000	60,000
Office rent, storage and		11	1,050	2,756	2,100	5,845
utilities
Professional fees			7,765	13,197	10,952	30,186
Property taxes			558	-	558	-
Transfer agent and filing fees			2,849	8,987	5,686	18,027
Travel			4,620	3,756	6,328	8,398
			67,036	82,673	124,076	166,428
Other
Interest Income and			359	1,262	518	1,610
Recovery
Gain on sale of land		5	-	-	-	66,354
Net income (loss) for the year			(66,677)	(81,411)	(123,558)	(98,464)
Other comprehensive income
(loss) for the year
Foreign currency translation			(3,652)	(15,598)	(10,109)	181
			(3,652)	(15,998)	(10,109)	181
Comprehensive income (loss)			(70,329)	(97,009)	(133,667)	(98,283)
for the year
Loss per common share – basic			(0.01)	(0.01)	(0.01)	(0.01)
and diluted
Weighted average number of			11,048,963	9,324,951	11,048,963	9,324,951
common shares outstanding

The accompanying notes are an integral part of these interim consolidated financial statements

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Lovitt Resources Inc.

Interim Condensed Consolidated Statements of Changes in Equity For the six months ended December 31, 2020 and 2019

(Unaudited - Expressed in U.S. Dollars)

	Number of	Share Capital	Number	Preferred	Contributed	Currency	Deficit	Total
	Common	Amount	of	Shares	Surplus	Translation	$	$
	Shares	$	Warrants	Amount	$	Reserve
				$		$
Balance at June 30, 2019	9,324,951	4,312,196	-	1	935,727	(23,930)	(5,996,024)	(772,030)
Net loss for the year	-	-	-	-	-	(5,233)	(98,463)	(103,696)
Balance at December 31, 2019	9,324,951	4,312,196	-	1	935,727	(29,163)	(6,094,487)	(875,726)
Net loss for the period	-	-	-	-	-	747	(123,815)	(123,068)
Balance at June 30, 2020	9,324,951	4,312,196	-	1	935,727	(28,416)	(6,218,302)	(998,794)
Private placement:
Shares issued	1,724,012	193,869	-	-	-	-	-	193,869
Share issuance costs		(2,549)						(2,549)
Warrants issued	-	-	1,724,012	-	-	-	-	-
Net loss for the period	-	-	-	-	-	-	(133,667)	(133,667)
Balance at December 31, 2020	11,048,963	4,503,516	1,724,012	1	935,727	(28,416)	(6,351,969)	(941,141)

The accompanying notes are an integral part of these interim consolidated financial statements

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Lovitt Resources Inc.

Interim Condensed Consolidated Statements of Cash Flows For the six months ended December 31, 2020 and 2019

(Expressed in U.S. Dollars)

	three-month	three-month	six-month	six-month
	period ended	period ended	period ended	period ended
	December	December	December	December
	31 ,2020	31,2019	30,2020	30,2019
	$	$	$	$
Operating activities
Loss for the period	(66,677)	(97,009)	(123,558)	(54,802)
Items not affecting cash:
Depreciation of property, plant and	435	541	870	1,080
equipment
Gain on sale of land	-	-	-	(66,354)
Changes in non-cash working capital:
Amounts receivable	(373)	(3,110)	(1,147)	1,058
Note receivable	5,358	10,620	7,358	(4,584)
Prepaid expenses	558	2,310	1,090	403
Accounts payable and accrued liabilities	(5,868)	11,438	(39,500)	(903)
Accrued interest	17,620	21,112	33,571	23,866
Note payable	25	85	45	39
Cash used in operating activities	(48,921)	(54,013)	(121,270)	(100,197)
Investing activities
Purchase of property, plant and	-	248	-	414
equipment
Expenditures on mineral properties	(55,935)	(10,354)	(65,181)	-
Proceeds from sale of land	-	-	-	66,354
Cash provided by investing activities	(55,935)	(10,106)	(65,181)	66,768
Financing activities
Private Placement proceeds	-	-	191,320	-
Demand loan proceeds	3,286	40,830	18,134	33,160
Cash provided by financing activities	3,286	40,830	209,454	33,160
Effect of exchange rate changes	(3,652)	4,569	(10,109)	(10,031)
Increase (decrease) in cash during the year	(101,571)	(18,720)	23,003	(10,300)
Cash, beginning of period	118,267	19,710	151	10,300
Cash, end of period	13,045	990	13,045	990

The accompanying notes are an integral part of these consolidated financial statements

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Lovitt Resources Inc. Notes to the Interim Condensed Consolidated Financial Statements For the six months ended December 31, 2020 (Unaudited - Expressed in U.S. Dollars)

1. NATURE OF OPERATIONS AND GOING CONCERN

The Company is incorporated under the Company Act (British Columbia). The Company holds land and mineral interests located in Wenatchee, Washington, U.S.A. The Company finances its operations by selling land.

The Company’s principal office is located at 20392 73A Avenue, Langley, B.C. V2Y 1V1.

These interim condensed consolidated financial statements are prepared on a going concern basis, which presumes the realization of assets and discharge of liabilities in the normal course of business for the foreseeable future. The Company has made an assessment of its ability to continue as a going concern and is aware of material uncertainties as set out below that may cast significant doubt on the validity of this assumption. At December 31, 2020, the Company has no source of operating cash flow and a deficit of $ 6,351,969 (December 31, 2019 - $ 6,094,487). At December 31, 2020, the Company had a working capital deficiency of $ 1,826,645 (December 31, 2019 - $ 1,696,316) and expects to incur further losses in the development of its business.

The Company’s ability to continue as a going concern is contingent on its ability to obtain additional financing. The current equity market conditions, the challenging funding environment and the low price of the Company’s common shares make it dilutive and difficult to raise funds by the sale of the Company’s shares. In order to ensure its ability to continue operating, the Company expects to sell land and any remaining non-mining equipment to finance a mineral exploration and development program. However, there is no assurance that any such activity will generate funds that will be available for investments or operations.

On March 11, 2020, the World Health Organization characterized the outbreak of a strain of the novel coronavirus (“COVID-19”) as a pandemic which has resulted in a series of public health and emergency measures that have been put in place to combat the spread of the virus. The duration and impact of COVID 19 is unknown at this time and it is not possible to reliably estimate the impact that the length and severity of these developments will have on the financial results and condition of the Company in future periods.

These interim condensed consolidated financial statements do not include any adjustments to the recoverability and classification of recorded assets, or the amounts of, and classification of, liabilities which would be necessary if the going concern assumption were not appropriate. Such adjustments could be material.

The amounts shown as mineral properties and related deferred costs represent costs net of recoveries to date, less amounts written off, and do not necessarily represent present or future values. Recoverability of the amounts shown for mineral properties is dependent upon the discovery of economically recoverable mineral reserves, securing and maintaining title and beneficial interest in the properties, the ability of the Company to obtain financing necessary to complete the exploration and development of its mineral property interests, and on future profitable production or proceeds from the disposition of the mineral property interests.

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Lovitt Resources Inc. Notes to the Interim Condensed Consolidated Financial Statements For the six months ended December 31, 2020 (Unaudited - Expressed in U.S. Dollars)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Statement of compliance

These condensed consolidated interim financial statements have been prepared in accordance with IAS 34, Interim Financial Reporting (“IAS 34”), as issued by the International Accounting Standards Board (“IASB”), and its interpretations, using accounting policies consistent with International Financial Reporting Standards (“IFRS”). The condensed interim financial statements should be read in conjunction with the annual financial statements for the years ended June 30, 2020, which have been prepared in accordance with IFRS as issued by the IASB and interpretations of the IFRS Interpretations Committee (“IFRIC”). The accounting policies followed in these condensed interim financial statements are consistent with those applied in the Company’s consolidated financial statements for the years ended June 30, 2020.

Basis of measurement

These interim condensed consolidated financial statements have been prepared on the historical cost basis except for financial instruments that have been measured at fair value. In addition, these interim condensed consolidated financial statements have been prepared using the accrual basis of accounting, except for cash flows information.

Basis of consolidation

These interim condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Lovitt Mining Company, Inc. (a U.S. corporation). Lovitt Mining Company, Inc.’s financial statements include the accounts of its wholly owned subsidiary, Gold King Inc. (a U.S. corporation). All significant inter-company balances and transactions have been eliminated.

2. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS

The preparation of these interim condensed consolidated financial statements requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the interim condensed consolidated financial statements and reported amounts of expenses during the reporting period. Actual outcomes could differ from these estimates. These financial statements include estimates which, by their nature, are uncertain.

The impacts of such estimates are pervasive throughout the financial statements and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised and future periods if the revision affects both current and future periods. These estimates are based on historical experience, current and future economic conditions and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Significant accounting judgements

• i) The determination of categories of financial assets and financial liabilities has been identified as an accounting policy which involved judgments or assessments made by management.

• ii) Management is required to assess the functional currency of each entity in the Company. In concluding that the U.S. dollar is the functional currency of the parent and its subsidiaries, management considered the currency that mainly influences the cost of providing goods and services in each jurisdiction in which the Company operates. As no single currency was clearly

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Lovitt Resources Inc. Notes to the Interim Condensed Consolidated Financial Statements For the six months ended December 31, 2020 (Unaudited - Expressed in U.S. Dollars)

2. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS (continued)

Significant accounting judgements (continued)

dominant, the Company also considered secondary indicators including the currency in which funds from financing activities are denominated and the currency in which funds are retained.

• iii) Management is required to assess impairment in respect of intangible exploration and evaluation assets. The triggering events are defined in IFRS 6. In making the assessment, management is required to make judgments on the status of each project and the future plans towards finding commercial reserves. The nature of exploration and evaluation activity is such that only a proportion of projects are ultimately successful, and some assets are likely to become impaired in future periods.

Management has determined that there were no impairment indicators present in respect of its mineral properties and as a result no impairment test was performed.

• iv) Although the Company takes steps to verify title to exploration and evaluation assets in which it has an interest, these procedures do not guarantee the Company’s title. Such properties may be subject to prior agreements or transfers and title may be affected by undetected defects.

• v) The assessment of the probability of future taxable income in which deferred tax assets can be utilized is based on the Company’s estimates of future profits or losses adjusted for significant nontaxable income and expenses and specific limits to the use of any unused tax loss or credit. If a positive forecast of taxable income indicates the probable use of a deferred tax asset, especially when it can be utilized without a time limit, that deferred tax asset is usually recognized in full. The recognition of deferred tax assets that are subject to certain legal or economic limits or uncertainties is assessed individually by management based on the specific facts and circumstances. Details of these can be found in Note 11.

• vi) Judgment is required to determine when transfer of control occurs relating to the sale of the Company’s land and other property, plant and equipment. Management based its assessment on a number of indicators of control, which include, but are not limited to whether the Company has present right of payment, and whether the significant risks and rewards and legal title have been transferred to the purchaser.

3. NOTE RECEIVABLE

On January 4, 2019, the Company sold a land parcel and settled part of the consideration with a $ 54,000 note receivable. The note bears interest at an annual rate of 6% and will be paid over sixty-two monthly instalments of $ 1,000 commencing February 1, 2019. The purchaser has the option to prepay all or part of the note.

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Lovitt Resources Inc.

Notes to the Interim Condensed Consolidated Financial Statements For the six months ended December 31, 2020

(Unaudited - Expressed in U.S. Dollars)

4. PROPERTY, PLANT AND EQUIPMENT

	Land $ Equipment $ Computers $ Vehicles $ Total $
Cost: Balance as at June 30, 2019 Additions Disposals Balance as at June 30, 2020 Additions Disposals Balance as at December 31, 2020	176,448 52,021 31,461 900 260,830 - 1,984 - - 1,984 (2,646) - - - (2,646)
	173,802 54,005 31,461 900 260,168 - - - - - - - - - -
	173,802 54,005 31,461 900 260,168
Accumulated depreciation: Balance as at June 30, 2019 Depreciation Balance as at June 30, 2020 Depreciation	- 46,640 30,079 900 77,619 - 1,410 230 - 1,640
	- 48,050 30,309 900 79,259 - 377 493 - 435
Balance as at December 31, 2020	- 48,427 30,802 900 80,129
Carrying amount:
At June 30, 2020	173,802 5,955 1,152 - 180,909
At December 31, 2020	173,802 5,578 659 - 180,039

5. MINERAL PROPERTIES

MINERAL PROPERTIES
	December 31	June 30
	2020	2020
	$	$
Lovitt Mineral Property – Washington, USA	1	1
Golden King and MacBeth Claims – Washington, USA	1	1
Deferred exploration costs	680,990	615,809
TOTAL	680,992	615,811

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Lovitt Resources Inc. Notes to the Interim Condensed Consolidated Financial Statements For the six months ended December 31, 2020 (Unaudited - Expressed in U.S. Dollars)

5. MINERAL PROPERTIES (continued)

As at December 31, 2020 and June 30, 2020, deferred exploration costs were as follows:

	December 31,	June 30,
	2020	2020
	$	$
Geology and consulting	329,021	267,640
Assay fees	29,227	25,427
Travel	129,690	129,690
Supplies and permits	39,724	39,724
Field expenditures	153,328	153,328
TOTAL	680,990	615,809

The Lovitt Mineral Property represents a 100% undivided interest in 200 acres with mineral rights. The Golden King and MacBeth claims represent a 100% undivided interest in 40 acres with mineral rights. The mineral interest is subject to a 5% net smelter royalty, payable to a former minority investor of Lovitt Mining Company Inc., as an incentive to a buyout concluded in 2004.

Mineral properties include nominal acquisition costs as they were written down in prior years. During the six months ended December 31, 2020, the Company incurred $ 65,181 (December 31, 2019 - $ 10,356) of exploration costs.

6. NOTE PAYABLE

The Company has a promissory note payable of $ 4,255 (December 31, 2019 - $ 4,417) to a corporation owned by a shareholder of the Company. The note bears interest at 5% per annum, is not collateralized, and has no fixed terms of repayment.

7. DEMAND LOANS

DEMAND LOANS
	December 31	June 30
	2020	2020
	$	$
No required monthly payments
interest calculated at 5% per annum; not collateralized, due on	94,380	94,380
demand
Loan from a corporation owned by a director of the Company
no required monthly payments; interest calculated at 5% per	851,647	833,513
annum; not collateralized, due on demand
Loan from a director of the Company
no required monthly payments; interest calculated at 5% per	9,493	9,493
annum; not collateralized, due on demand
No required monthly payments
interest calculated at 5% per annum; not collateralized, due on	25,000	25,000
demand

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Lovitt Resources Inc.

Notes to the Interim Condensed Consolidated Financial Statements For the six months ended December 31, 2020

(Unaudited - Expressed in U.S. Dollars)

7. DEMAND LOANS (continued)

No required monthly payments
interest calculated at 5% per annum; not collateralized, due on	345,000	345,000
demand
No required monthly payments
interest calculated at 5% per annum; not collateralized, due on	7,338	7,338
demand
	1,332,858	1,165,459

8. SHARE CAPITAL

a) Authorized Capital:

Unlimited number of common shares without par value, and 100,000,000 preferred shares with par value of $ 0.00001 per share.

b) Shares

The Company’s outstanding shares have remained at 9,324,951 since May 2, 2012.

On August 4, 2020, the Company issued a total of 1,724,012 common shares for gross proceeds of $193,869.

c) Warrants

On August 4, 2020, the Company issued 1,724,012 warrants in connection with the private placement. The warrants are at a price of $0.25 and expire on February 4, 2021.

d) Share option plan

The Company has established a rolling share option plan (the “Plan”), in which the maximum number of common shares which can be reserved for issuance under the Plan is 10% of the issued and outstanding shares of the Company. The exercise price of the options is set at the Company’s closing share price on the day before the grant date, less allowable discounts in accordance with the policies of the TSXV. Options granted may be subject to vesting provisions as determined by the Board of Directors and have a maximum term of five years.

Option-pricing models require the use of estimates and assumptions including the expected volatility. Changes in the underlying assumptions can materially affect the fair value estimates and, therefore, existing models do not necessarily provide reliable measure of the fair value of the Company’s share options.

The Company had no share options outstanding as at December 31, 2020 and June 30, 2020.

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Lovitt Resources Inc. Notes to the Interim Condensed Consolidated Financial Statements For the six months ended December 31, 2020 (Unaudited - Expressed in U.S. Dollars)

8. SHARE CAPITAL (continued)

• c) Preferred shares :

						Number	Amount
							$
Balance as at December	31,	2020	and June	30,	2020	75,160	1

Preferred shares issued are comprised of 75,160 non-cumulative preferred series A issue 1 shares with a face value of $ 10 each, and a 5% annual coupon rate.

9. SEGMENTED INFORMATION

As at December 31, 2020 and June 30, 2020 the Company’s identifiable assets, revenue and net income (loss) in each of the geographic areas is as follows:

	December 31, 2020 $	June 30, 2020 $
	Identifiable assets Revenue Net income (loss)	Identifiable assets Revenue Net income (loss)
United States Canada	885,448 - (88,420) 18,954 - (35,138)	839,060 - (207,740) 4,838 - (67,886)
	914,402 - (123,558)	844,498 - (275,626)

10. FINANCIAL INSTRUMENTS

The Company classifies its financial instruments in the following categories: at fair value through profit and loss (“FVTPL”), at fair value through other comprehensive income (“FVOCI”) or at amortized cost.

a) Fair value hierarchy

IFRS 13 establishes a fair value hierarchy, for financial instruments measured at fair value, that reflects the significance of inputs used in making fair value measurements as follows:

Level 1 - quoted prices in active markets for identical assets or liabilities; Level 2 - inputs other than quoted prices included in Level 1 that are observable for the asset or liabilities, either directly (i.e. as prices) or indirectly (i.e. from derived prices); and

Level 3 - inputs for the asset or liability that are not based upon observable market data.

The fair value of cash is based on Level 1 inputs for the fair value hierarchy.

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Lovitt Resources Inc. Notes to the Interim Condensed Consolidated Financial Statements For the six months ended December 31, 2020 (Unaudited - Expressed in U.S. Dollars)

10. FINANCIAL INSTRUMENTS (continued)

The fair value of financial instruments at December 31, 2020 and June 30, 2020 are summarized as follows:

follows:
	December 31, 2020		June	30,	2020
		$		$
	Carrying amount	Fair value	Carrying		Fair value
			amount
Fair value through profit
or loss
Cash	13,045	13,045	151		151
Amortized cost
Amounts receivable	5,909	5,909	4,762		4,762
Note receivable	34,085	34,085	41,443		41,443
Accounts payable and	13,681	13,681	53,181		53,181
accrued liabilities
Accrued interest payable	421,722	421,722	388,151		388,151
Note payable	4,255	4,255	4,210		4,210
Demand loans1	1,332,858	1,332,858	1,321,724		1,321,724

1 The amounts shown for fair value represent the amount of funds required for immediate settlement.

b)

Financial risk management

The Company’s risk exposures and the impact on the Company’s financial instruments are summarized below:

Credit risk

Credit risk is the risk of loss associated with a counterparty’s inability to fulfil its payment obligations. Cash, amounts receivable and note receivable are exposed to credit risk due to the potential for counterparties to default on their contractual obligations. The maximum potential loss on all financial instruments is equal to the carrying amount of those items. The Company limits its exposure to credit loss by placing its cash with major financial institutions and dealing with credit worthy parties.

Liquidity risk

The Company ensures that there is sufficient capital in order to meet short-term business requirements, after taking into account the Company’s holdings of cash, in addition to listing assets that it can sell. The Company intends also to raise additional financing through the issuance of capital and its ability to do so is dependent on a number of factors including market acceptance, stock price and exploration results. See also Note 1. All of the Company’s financial liabilities are classified as current and are anticipated to mature within the next fiscal period.

Interest rate risk

Note payable and demand loans bear interest at fixed rates, or do not bear interest, and therefore do not expose the Company to interest rate cash flow risk.

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Lovitt Resources Inc. Notes to the Interim Condensed Consolidated Financial Statements For the six months ended December 31, 2020 (Unaudited - Expressed in U.S. Dollars)

10. FINANCIAL INSTRUMENTS (continued)

b) Financial risk management (continued)

Foreign exchange risk

The Company is subject to foreign exchange rate risk as the Company incurs transactions and has assets and liabilities denominated in Canadian dollars, whereas the parent and subsidiaries’ functional and reporting currency is the U.S. dollar. The fluctuation of the US Dollar in relation to the Canadian Dollar will have an impact upon the profitability of the Company and the value of the Company’s assets and the amount of shareholders’ equity. The Company has not entered into any agreements or purchased any instruments to hedge possible currency risks.

Price risk

The Company is exposed to price risk with respect to commodity and equity prices. Equity price risk is defined as the potential adverse impact on the Company’s earnings due to movements in individual equity prices or general movements in the level of the stock market. Commodity price risk is defined as the potential adverse impact on earnings and economic value due to commodity price movements and volatilities. The Company’s portfolio of properties has exposure to predominantly gold. The price of this commodity will affect the value of the Company and the potential value of its properties.

11. RELATED PARTY DISCLOSURES

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly. Key management personnel include the Company’s executive officers and directors.

As at December 31, 2020 accounts payable includes $ Nil (June 30, 2020 - $ Nil) owed to a director and members of his immediate family and $ Nil (June 30, 2020 - $ 8,329) owed to two corporations owned by a director.

As at December 31, 2020, accrued interest payable includes $ 176,587 (June 30, 2020 - $ 154,297) due to a director and members of his family, and a corporation owned by a director. Accrued interest payable also includes $ 8,320 (June 30, 2020 - $ 7,300) due to two corporations controlled by a director.

As at December 31, 2020, demand loans include loans outstanding of $ 861,140 (June 30, 2020 - $ 843,006) to a director and a corporation owned by a director. See also Note 6 for note payable to related party. On February 8, 2021, a value of $186,664 in common shares were issued to settle some of this outstanding debt. See Note 13.

During the six months ended December 31, 2020, the Company was charged $ 60,000 (December 31, 2019 - $ 60,000) for accounting, consulting, management services and casual labour provided by directors and members of their immediate families and by a corporation owned by a director of the Company.

During the six months ended December 31, 2020, the Company paid $ Nil (December 31, 2019 - $ 5,114) for office rent to a director.

• 14 -

Notes to the Interim Condensed Consolidated Financial Statements For the six months ended December 31, 2020 (Unaudited - Expressed in U.S. Dollars)

Lovitt Resources Inc.

12. DEPOSIT

On January 28, 2019, the Company received a deposit in respect of a proposed land sale which is subject to regulatory and Board approval.

13. EVENT AFTER THE REPORTING PERIOD

On February 4, 2021, a total of 1,724,012 warrants expired with an exercise price of $0.25.

On February 8, 2021, the Company issued a total of 1,251,871 shares for debt at a price of CA$0.17 per share. Of the 1,251,871 shares, 1,098,024 shares were issued to an officer and a director of the Company to partially settle some existing loans.

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